The biotech sector has been diagnosed with a “money flow” problem. In short, too many new investors chasing what’s been a monumental ride. Who can blame them for wanting a piece of this action? The iShares Nasdaq Biotechnology ETF, for example, is up 54% over a year.

Fund manager’s fear of the bond market is greater than equity market greed. That’s according to Bank of America Merrill Lynch’s fund manager survey for September, which finds that five years on from the financial crisis, investors are happily long assets tied to the U.S. real estate market and macro “normalization.”

In the “Great Divergences & Yogi Berra” note today, Bank of America strategists pointed out that there’s a war raging between deflationary debt fundamentals and aggressive reflationary policies. With the former getting the upper hand in the past year thanks to “the intensity of central bank reflation and the U.S. housing recovery.”

They reiterated their overweight equities stance, saying that a recession would be needed for them to get more positive on bonds and that they would have to see inflation for them to get any more bullish on commodities.

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